speculation are useless to society not true

[Christiaan]

dear readers

I've read it a couple of times on forums that speculation are useless.It serves no useful function to society.With most "normal careers' you produce either a product or a service.But the act of speculation produces nothing.It does not add anything usefull to society.

Forex trading is a zero sum game right.But if you think about it,no matter which trader is making money or losing money the broker you use still banks the spread right?unless ofcourse you believe you trade against the broker which is incorrect.

So it is a zero sum game in the conventional sense,excepts that the broker with the spead and other charges always makes his money.That means that the act of speculation or forex trading to be specific does add something to the world.It adds money

Think about we speculators add money to the world in both our brokers expenses and their profits.Our brokers have bills to pay,where does that money come from,it comes from the market.We create the maket,what happens to the brokers profit who knows?

so the act of speculation is not useless.Like a chairmaker adds chairs to the world we add money to the world.Makes sense when you think about it right.

How much money,my broker's yearly profit went for $62.8 million.So when people say that "ahh we should tax them what they are doing is useless"or something like that I do not agree.this should make sense when you think about it right?

I mean the forex market does what $2 trillion dollors a day or something like that.It's not quite a normal way to make your money but because we speculate non-speculators does benefit.

tell me what you think?

 

[shadowninja]

How about this: if we didn't have traders, we wouldn't have brokers. If the brokers didn't exist, the people it employed (managers, sales people, marketing people, accountants, IT staff, secretaries, etc) would be out of work and the business services it requires (mailing, telecoms, toilet cleaning, etc) would have less income. In Britain, all businesses pay corporation tax and business rates plus hire the offices. This is money going into the local community. People really don't think properly, do they?

Besides, I know quite a few traders who have an interest in supporting those less fortunate than themselves ie charities. People really don't think properly, do they?

It's the same for non-doms. Ok, so they skip paying tax due to loop holes but most of them have chauffeurs, gardeners, cleaners, etc and buy their cars, clothes, food, electricity, gas, etc locally so money does appear in Badger's coffers. People really d... you get the idea.

The real reason people complain is that they know they are failures, they've failed to achieve their dreams and are dead husks inside so their only option is to bring down the successful. We all know these types of people. And we all try to avoid them. Unfortunately, most of these walking dead live in the UK.

 

[oiltanker]

all trade/occupation is speculation of making a profit . its not a zero sum game in forex. CB pump money in they have invented all the time.

 

[Martinghoul]

I sorta agree with the idea that speculators are useless or, rather, marginally useful... In general, finance, as a whole, is either useless or, at best, marginally useful. However, many good things in life, such as art, music, good food etc, are, strictly speaking, "useless". So, really, unless we have a way of defining "useless" that everyone can agree on, speculation is neither more or less useless than any other human activity.

 

[shadowninja]

I sorta agree with the idea that speculators are useless or, rather, marginally useful... In general, finance, as a whole, is either useless or, at best, marginally useful. However, many good things in life, such as art, music, good food etc, are, strictly speaking, "useless". So, really, unless we have a way of defining "useless" that everyone can agree on, speculation is neither more or less useless than any other human activity.

Yep, we could go through every "job" and work out which are actually useful. By God, if aliens invaded Earth and demanded we justified our existence, most people would be zapped.

 

[Hilarymannah]

Most retail traders are accomplished business people, having contributed to society as a whole, and now speculate further in the markets.
Remember,..money, as an exchange of value, doesn't come from thin air,(unless you're a central bank, but we won't go there)
Unfortunately, the banking industry have corrupted the system, to such an extent as to validate the "no value to society" comment!
To speculate in the absence of fraud and manipulation, is of course a part of business due process, and so is of great value to society,..go figure : /

 

[oildaytrader]

Speculation is good if done by decent people.I know speculators who earn a load of money , and give more to charity than some entire town folk put together.They create infrastructure in poor countries and help humanity.

If speculation is done by scum with the sole intention of filling their own pockets, at the expense of robbing taxpayers, pension funds and others ,and for creating misery to pensioners , headaches for governments and leads to financial chaos , it has very no value to society.

 

[MrGecko]

Disagree with all comments so far. Speculators accept risk - this is a service.

 

[oildaytrader]

Disagree with all comments so far. Speculators accept risk - this is a service.

Some of them do not understand risk, so how can they be accepting risk?A load of Lloyds members did not understand the risks they were taking.

The investment banks did not understand risk, how can they be providing any service?

 

[moreliver]

Some of them do not understand risk, so how can they be accepting risk?A load of Lloyds members did not understand the risks they were taking.

The investment banks did not understand risk, how can they be providing any service?

Nevertheless, as MrGecko pointed out, speculation exists to offset risk to actual producers.

Oh, and then there's providing liquidity to markets, i.e. enabling a large enough pool of buyers and sellers to do what they have to do.

Did the original poster have a bad experience, then?

 

[shadowninja]

Did the original poster have a bad experience, then?

Try going to a soiree attended mainly by therapists and medical staff. Mention that you trade and you will definitely hear, "Ohhhh! I do hope you don't short sell!!!" with the compulsory scowl.

 

[Martinghoul]

Disagree with all comments so far. Speculators accept risk - this is a service.

Disagree, speculators are unable to structurally accept risk... The best they can do is take some risk on, possibly warehouse it for some time and then pass it on to an end-user on the other side, i.e. to someone who structurally needs this risk to offset their own exposure.

Therefore, speculators are, at best, intermediaries that enable the mkt to function smoothly. Generally, as I mentioned, that's the role of finance as whole also. Don't get me wrong, intermediation is an important function, but it's also important to realize that it's not productive. In this sense, speculators are, ironically, like regulators. They're not, strictly speaking, productive and the fees they extract are, effectively, a tax on true underlying economic activity. However, it's also clear that we don't know how to structure economic activity without financial intermediation and regulation, so their tax is a necessary evil.

 

[squall321]

dear readers

I've read it a couple of times on forums that speculation are useless.It serves no useful function to society.With most "normal careers' you produce either a product or a service.But the act of speculation produces nothing.It does not add anything usefull to society.

so?

 

[MrGecko]

OK, I will meet you half way:

speculators are unable to structurally accept risk... The best they can do is take some risk on, possibly warehouse it for some time and then pass it on to an end-user on the other side

Yes you are right, unlike the case of, say, insurers [obvious exceptions aside] who hold an inventory of risks for a fee.

intermediation is an important function

Yes it is.

it's also important to realize that it's not productive

I would say the process of risk-transferral is facilitated by speculators who warehouse risk, and so the increase in the "smooth running" of market operations is a product (added value) of speculators (amongst other things, like regulation etc).

 

[maiden22]

The ability to buy and sell currencies is vital. The motives of those that participate in the process are irrelevant.

 

[wackypete2]

You don't need to understand risk to accept it. Newbie traders are a good example. Most know there is risk when they start out. It is drilled into them with endless disclaimers...BUT they don't really understand it so they overleverage or undercapitalize. The bottom line is if the commodity producer is selling and the newbie is buying, then they are taking on/accepting the risk no matter what the outcome is.

Peter

 

[findlay234]

Most retail traders are accomplished business people, having contributed to society as a whole, and now speculate further in the markets.
Remember,..money, as an exchange of value, doesn't come from thin air,(unless you're a central bank, but we won't go there)
Unfortunately, the banking industry have corrupted the system, to such an extent as to validate the "no value to society" comment!
To speculate in the absence of fraud and manipulation, is of course a part of business due process, and so is of great value to society,..go figure : /

Unfortunately money does come from thin air in our modern banking systems and not just from the central banks....
http://en.wikipedia.org/wiki/Fractional-reserve_banking



Could speculators provide liquidity to those traders who trade to achieve something i.e corporate buyers etc? excuse my ignorance but arent there major oil companies that purchase crude off the open market to then refine and sell to the public? If there werent speculators then liquidity would be lacking for these traders... i could all be wrong though...

Cheers
Fin
PS think this might be my first post...

 

[barryb]

Some of them do not understand risk, so how can they be accepting risk?A load of Lloyds members did not understand the risks they were taking.

The investment banks did not understand risk, how can they be providing any service?

A very dense comment.

 

[Trader333]

Think about we speculators add money to the world in both our brokers expenses and their profits.Our brokers have bills to pay,where does that money come from,it comes from the market.

Are you in some way religious because this sounds like an attempt to justify something that from certain religious doctrines would be unacceptable ?

If not then why are you even remotely concerned ?

The idea that speculation is adding value to society by providing an income to brokers etc is the same as saying that gamblers add value to society by providing an income to bookmakers.

In my view both are in the same category as second hand car salesmen or telephone sanitation engineers


Paul

 

[gooseman]

everyon is a philosopher in this game-until you put your phone through the screen.